Home Modifications and the Home ATM Resurgence
The Treasuries Bail-Out Program called the Home Affordable Modification Program or HAMP has repeatedly been called a failure. It has been called a failure not only from inside the treasury by Neil Barofsky, who is the special inspector, for the treasury but also by numerous outside sources. Neil Barofsky has also spoken out against a number of other initiatives and poor decisions made by the treasury and the federal government. He is know for telling the truth in situations which put him under potentially harsh internal pressures. 1
The problems with HAMP are but are not limited to, software problems, constant changes in rules and processes. Owners were pressured into temporary modifications with the same total lack of documentation just like the original loans that created the problem. The result of influx of undocumented modifications was a dire backlog for scarce resources. 1
Bad underwriting followed by further bad underwriting creating even more problems for the people they were supposed to be helping in the first place. 1
The program was infused with 75 Billion dollars in TARP funding. The initial goal was to help 3-4 million families and individuals stay in their homes through modification of existing mortgages.1
The program is overseen by former Fannie Mae executive Herb Allison. Fannie Mae and Freddie Mac have both been bailed out and are mostly owned by the US Government. 1
Direct quote from the article below….
And then came Mr. Allison, who wanted to make sure we all understood that the original goal of the program was not to get 3-4 million borrowers into permanent mods but to offer 3-4 million trial modifications. He even cited some document where that was written.
Okay, semantics aside, I don't believe that was the initial message. I guess it just wouldn't sound too good for the President to stand up at a big rally in Cleveland and say, "Folks, we're going to take 75 billion of your hard earned dollars and try to keep 3-4 million troubled borrowers in their homes. And when we're done you're going to see that less than half of them actually succeeded!!!" 1
February foreclosure Rate of 3.31% a 51.1% increase year over year. 7.9 million loans are not current. The biggest change occurring seems to be that homeowners are less likely to pay their mortgage before their other bills. Many home owners are doing this because they are forced to BUT not all others are actually strategically paying their mortgage last. 2
So lets do some math 7.9 million home owners are not paying their mortgages. Lets assume the median home loan is $1000.00 a month that is 7.9 billion dollars available for consumer spending or to pay other bills every single month those homes stay in foreclosure and payments are not made. Another article estimated that half of consumer homeowners were using that money for other purposes giving us a total of roughly 3.95 billion in consumer spending moving directly into the economy.
In a case study a person with an $1880.00 monthly mortgage payment they defaulted on was actively spending their mortgage payment from their bank account. The spending was not on necessities; but included premium cable with additional charges for premium services, nail salon, tanning salons, liquor stores, shopping at the Gap, Old Navy, Home Depot, Sears and more. 2
Studies also show that if you know someone who has or had defaulted they are more likely to also default. It takes over a year to two years in some cases to be thrown out of your home. 2
Works Cited
1. Olick, Diana. “Treasury Confirms Underwater Help”. www.CNBC.com. Published: Thursday, 25 Mar 2010
3:23 PM ET.
http://www.cnbc.com/id/36039123
2. Olick, Diana. “Mortgage Defaults May Be Driving Consumer Spending”. www.CNBC.com. Monday, 12 Apr 2010
11:15 AM ET. http://www.cnbc.com/id/36422316
Monday, April 12, 2010
Migration of American Families
Migration of American Families
It is a common thing today that I hear the stories of struggling families or individuals leaving their homes to move south. The purpose and problem is simple while American median home sizes are shrinking there is a part of the equation which seems unidentified by the mainstream media. What is missing is the fact that there is a migration of sorts happening across America as homeowners under water or under foreclosure are seeing the last means of shelter as living in a moving home of one sort or another.
Many Americans are loosing or giving up their homes, loosing their cars and giving up on the credit system entirely . With one common exception the RV in the driveway. Whether a late model they own outright or something they must continue to make payments on.
The stories are simple as jobs are lost and unemployment runs out citizens are leaving the state for jobs in other states they are taking their homes with them. Enrolling there children in schools or home schooling them in a mobile home of one kind or another. Campgrounds over the last ten years or so have commonly had Section Eight or Catch housing of one kind or another as families have been placed in motels and campgrounds alike during the summer months as no other housing was available. But now it is much more common.
While it is not apparent at first glance this does have a global impact. Smaller houses greatly impact GDP and global economies. As homes shrink there is less room to store items there is less in the way of overall assets and these families will spend less on most aspects of there lives in the scope of products whether domestic or global products.
The effects are much larger than most realize as every single week I hear stories of those who cannot find work and who are leaving to find work in a Mobil home pickup truck with a mattress in the back, or van. Older couples are often giving up there second homes or giving up their vacation homes.
It has always been the case that young professionals move to where the work is or create opportunities in their own communities. It has not been commonplace for a long time for families to uproot there children on a regular basis to move to where work is. The stress on the family can bring them closer together or rip them apart.
Other global implications are also significant as for the first time in many years immigration has slowed from the Mexican border and border enforcement and deportation has increased as Visas expire and less work is available. The result for these families and all of us will be a lower standard of living, increased taxations on communities suffering as a result of the increased population housed in campgrounds within their communities.
It is a common thing today that I hear the stories of struggling families or individuals leaving their homes to move south. The purpose and problem is simple while American median home sizes are shrinking there is a part of the equation which seems unidentified by the mainstream media. What is missing is the fact that there is a migration of sorts happening across America as homeowners under water or under foreclosure are seeing the last means of shelter as living in a moving home of one sort or another.
Many Americans are loosing or giving up their homes, loosing their cars and giving up on the credit system entirely . With one common exception the RV in the driveway. Whether a late model they own outright or something they must continue to make payments on.
The stories are simple as jobs are lost and unemployment runs out citizens are leaving the state for jobs in other states they are taking their homes with them. Enrolling there children in schools or home schooling them in a mobile home of one kind or another. Campgrounds over the last ten years or so have commonly had Section Eight or Catch housing of one kind or another as families have been placed in motels and campgrounds alike during the summer months as no other housing was available. But now it is much more common.
While it is not apparent at first glance this does have a global impact. Smaller houses greatly impact GDP and global economies. As homes shrink there is less room to store items there is less in the way of overall assets and these families will spend less on most aspects of there lives in the scope of products whether domestic or global products.
The effects are much larger than most realize as every single week I hear stories of those who cannot find work and who are leaving to find work in a Mobil home pickup truck with a mattress in the back, or van. Older couples are often giving up there second homes or giving up their vacation homes.
It has always been the case that young professionals move to where the work is or create opportunities in their own communities. It has not been commonplace for a long time for families to uproot there children on a regular basis to move to where work is. The stress on the family can bring them closer together or rip them apart.
Other global implications are also significant as for the first time in many years immigration has slowed from the Mexican border and border enforcement and deportation has increased as Visas expire and less work is available. The result for these families and all of us will be a lower standard of living, increased taxations on communities suffering as a result of the increased population housed in campgrounds within their communities.
Migration of American Families
Migration of American Families
It is a common thing today that I hear the stories of struggling families or individuals leaving their homes to move south. The purpose and problem is simple while American median home sizes are shrinking there is a part of the equation which seems unidentified by the mainstream media. What is missing is the fact that there is a migration of sorts happening across America as homeowners under water or under foreclosure are seeing the last means of shelter as living in a moving home of one sort or another.
Many Americans are loosing their homes many are loosing their cars and giving up on the credit system entirely loosing or giving up their homes. With one common exception the RV in the driveway. Whether a late model they own outright or something they must continue to make payments on.
The stories are simple as jobs are lost and unemployment runs out Citizens are leaving the State for jobs in other states they are taking their homes with them. Enrolling there children in schools or home schooling them in a Mobil home of one kind or another. Campgrounds over the last ten years or so have commonly had section eight or catch housing of one kind or another as families have been placed in motels and campgrounds alike during the summer months as no other housing was available. But now it is much more common.
While it is not apparent at first glance this does have a global impact. Smaller houses greatly impact GDP and global economies. As homes shrink there is less room to store items there is less in the way of overall assets and these families will spend less on most aspects of there lives in the scope of products whether domestic or global products.
The effects are much larger than most realize as every single week I hear stories of those who cannot find work and who are leaving to find work in a Mobil home pickup truck with a mattress in the back, or Van. Older couples are often giving up there second homes or giving up there vacation homes.
It has always been the case that young professionals move to where the work is or create opportunities in their own communities. It has not been commonplace for a long time for families to uproot there children on a regular basis to move to where work is the stress on the family can bring them closer together or rip them apart.
Other global implications are also significant as for the first time in many years immigration has slowed from the Mexican border and border enforcement and deportation has increased as visas expire and less work is available. The result for these families and all of us will be a lower standard of living increased taxations on communities suffering as a result of the increased population housed in campgrounds within their communities.
It is a common thing today that I hear the stories of struggling families or individuals leaving their homes to move south. The purpose and problem is simple while American median home sizes are shrinking there is a part of the equation which seems unidentified by the mainstream media. What is missing is the fact that there is a migration of sorts happening across America as homeowners under water or under foreclosure are seeing the last means of shelter as living in a moving home of one sort or another.
Many Americans are loosing their homes many are loosing their cars and giving up on the credit system entirely loosing or giving up their homes. With one common exception the RV in the driveway. Whether a late model they own outright or something they must continue to make payments on.
The stories are simple as jobs are lost and unemployment runs out Citizens are leaving the State for jobs in other states they are taking their homes with them. Enrolling there children in schools or home schooling them in a Mobil home of one kind or another. Campgrounds over the last ten years or so have commonly had section eight or catch housing of one kind or another as families have been placed in motels and campgrounds alike during the summer months as no other housing was available. But now it is much more common.
While it is not apparent at first glance this does have a global impact. Smaller houses greatly impact GDP and global economies. As homes shrink there is less room to store items there is less in the way of overall assets and these families will spend less on most aspects of there lives in the scope of products whether domestic or global products.
The effects are much larger than most realize as every single week I hear stories of those who cannot find work and who are leaving to find work in a Mobil home pickup truck with a mattress in the back, or Van. Older couples are often giving up there second homes or giving up there vacation homes.
It has always been the case that young professionals move to where the work is or create opportunities in their own communities. It has not been commonplace for a long time for families to uproot there children on a regular basis to move to where work is the stress on the family can bring them closer together or rip them apart.
Other global implications are also significant as for the first time in many years immigration has slowed from the Mexican border and border enforcement and deportation has increased as visas expire and less work is available. The result for these families and all of us will be a lower standard of living increased taxations on communities suffering as a result of the increased population housed in campgrounds within their communities.
Subscribe to:
Posts (Atom)
